J.M.
If it's only for a 4 hr get together, I would try to get them to meet you in a public place... Maybe you could do picnic at a local park, so the kids can play while the adults chill out and visit.
Other than that, Yes, I would say something... I think it would be perfectly acceptable to tell them "I am a bit nervous about having my kids around a dog that I can't trust absolutely... I know you trust him, but kids and animals are both unpredictable, and I wouldn't want one to set off the other...
If you have to, you could even make something up... (Yeah, Suzie is a little anxious around big dogs lately, since she heard about Fido biting Cousin Soandso. I think it would be better if we could keep the dogs separated from the kids while we are visiting... I would like to allow her to work through this on her own.)